ChangXin Memory Technologies (CXMT), China’s largest DRAM maker, is running into what amounts to a ceiling on expanding DRAM output. That is likely to keep pressure on the global memory market from supply shortages and rising prices. Expectations that China’s ramp-up would threaten major players such as Samsung Electronics and SK Hynix are fading, as low yields and U.S. restrictions on exports of semiconductor equipment are blocking further expansion.

Cryptopolitan, a blockchain media outlet, reported on Aug. 25 that CXMT’s monthly wafer output rose to about 240,000 by the end of last year, but the pace of expansion has since slowed sharply. The industry expects CXMT’s output to stay at a similar level throughout this year. Output is about double the 2024 level, but with further expansion blocked, assessments say it is not enough to resolve the global DRAM shortage.

Factors cited as blocking CXMT’s output increase include U.S. restrictions on exports of advanced semiconductor equipment and low yields. Counterpoint Research said CXMT’s first-generation 10-nanometre-class DRAM yield is 42 percent lower than Samsung Electronics and SK Hynix, with the absolute yield also remaining at about 50 percent. That structure makes it difficult to significantly increase the volume of memory that can actually be shipped even if production capacity is expanded.

The gap is also large in production scale. Even if CXMT runs its capacity at the maximum level, its production scale is estimated at about half of SK Hynix’s and about 30 percent of Samsung Electronics’. That is why analysis says that although CXMT is expanding its influence in China, it is not at a stage where it has secured enough volume to change the balance of global memory supply.

These supply constraints are also affecting DRAM prices. Market researcher TrendForce forecast that commodity DRAM contract prices in the third quarter of 2026 will rise a further 13 to 18 percent from the previous quarter. It cited strong AI server demand and major memory makers adjusting output.

JPMorgan Global Research has suggested the possibility that DRAM prices could rise more than 400 percent from early 2024 to the end of 2026. It cited hyperscale operators pre-empting supply through long-term contracts, reducing the volume of memory that general customers can secure.

The burden from rising memory prices is not expected to be limited to data centres. Price pressure for components could spread to consumer electronics such as smartphones and PCs.

Omdia expects memory chips to account for more than half of total semiconductor sales in 2026. It cited the possibility that memory supply used in general electronics could shrink as manufacturers focus production capacity on relatively higher-margin AI-related products.

CXMT’s growth itself has not stalled. CXMT moved out of a loss-making phase that relied on government support and posted $7.5 billion in revenue in the first quarter this year. It also completed a Shanghai stock market listing worth $8.6 billion.

It signed a more than $7 billion, five-year long-term memory supply contract with ByteDance. Some deals were reported to have involved Chinese buyers paying higher prices than Samsung Electronics and SK Hynix. Counterpoint Research estimates CXMT’s share of global DRAM bit shipments at about 9 percent.

The issue is that it still lacks enough headroom to meet demand in China. The Chinese government has asked CXMT to prioritise domestic customers, but current output is also tight for meeting domestic demand.

Goldman Sachs forecast that CXMT will meet about 41 percent of China’s DRAM demand in 2026. It expects the coverage ratio to remain around 50 percent even in 2028. That means that although China is trying to reduce dependence on foreign memory makers such as Samsung Electronics and SK Hynix, it will be difficult to replace them in the short term.

Global rivals are also moving to expand capacity, but new facilities will be difficult to bring online quickly. SK Hynix decided in early August to invest 54 trillion won to build 2 new fabs. But the Y2 DRAM plant is expected to enter the clean-room stage only in mid-2029. Samsung Electronics’ memory business also recently posted its biggest-ever quarterly revenue, but it expects supply constraints to continue through the second half of 2026.

CXMT plans to start up new production facilities in Shanghai and Beijing in 2027 and expand monthly production capacity to 420,000 wafers. But until the new facilities are fully up and running, limited supply combined with strong AI demand is likely to keep upward pressure on DRAM prices.

Ultimately, even as China’s memory makers intensify their catch-up, CXMT’s limits on further output growth in the near term are increasingly likely to sustain the rise in memory prices rather than ease the global DRAM supply shortage.